Levels and Trends in the Income Mobility of U.S. Families, 1977–2012
Much of America’s promise is predicated on the existence of economic mobility—the idea that people are not limited or defined by their current economic circumstances, but can move up the income ladder based on their effort and accomplishments. Changes in economic mobility are of particular consequence when economic disparity among families is increasing, as in the United States in recent decades. When family income inequality is increasing, changes in the degree to which families move up and down can either offset or amplify longer-term inequality. Other things being equal, an economy with rising mobility will result in a more equal distribution of lifetime incomes than an economy with declining mobility.
This paper examines patterns of income mobility of U.S. families with working-age heads and spouses between 1977 and 2012, using data from the Panel Study of Income Dynamics (PSID) and a number of mobility concepts and measures. Calculating these measures for overlapping decades, the paper documents mobility levels and trends based on a post-tax-and-transfer measure of family income adjusted for family size.